New Jersey's Sandy Response Faulted

New Jersey has received hundreds of millions of dollars from the federal government to address the losses and damage caused by Hurricane Sandy 20 months ago. But as a new hurricane season begins, thousands of homeowners in the state are still waiting for help, and much of the money remains unspent.

The Los Angeles Times takes New Jersey's state government to task in a June 20th article ( "Since Sandy, a storm pattern of costly stumbles in New Jersey," by Joseph Tanfani). "Richard Constable III, head of the [New Jersey] Department of Community Affairs, flew to New Orleans to meet battle-scarred veterans of Hurricane Katrina," the Times reports. "A $10-billion reconstruction program there called Road Home had become notorious for long delays, confusing rules, and mishandled applications. Similar complaints were widespread after Hurricane Ike walloped Texas in September 2008, the costliest storm in the state's history, three years after Katrina. Yet New Jersey officials ended up hiring some of the same companies that stumbled in Louisiana and Texas. Today, thousands of frustrated homeowners are still waiting for assistance, and hundreds of millions of dollars in aid are tied up in a system that no one seems able to unravel."

Like other states hard hit by major disasters, New Jersey turned to private firms to manage federal emergency relief and recovery money. But according to the Times report, the firms that won contracts had not performed well in previous disasters. The paper cites the example of CDM Smith, a Cambridge, Massachusetts-based firm that had been hired to manage the aftermath of Hurricane Ike in Galveston. That effort ended in dissatisfaction and lawsuits, and state officials replaced CDM Smith with a different contractor. When New Jersey hired CDM after Sandy, Texans wondered why. John Henneberger, co-director of the Texas Low-Income Housing Information Service, an advocacy group, commented to the Times: "Everybody here was saying: 'What the hell? Didn't anybody tell them?'"

Another private firm, HGI (Hammerman & Gainer), was hired to run Louisiana's Road Home program after Katrina. Between 2009 and 2013, HGI was hit with $556,500 in penalties for delays in managing applications, the Times reports. New Jersey then hired HGI to administer a $710-million program to rebuild homes destroyed by Sandy. Last year, however, the state began reviewing HGI's work, ultimately reversing 80% of the private firm's decisions to deny aid to applicants. The state then dismissed HGI, hiring another firm, ICF, to take over the contract work.

But ICF is the company that Louisiana used before hiring HGI to manage its Road Home program, according to the Times story. "Delays hampered the [Road Home] program, and the state assessed [ICF] a $1-million performance penalty in 2008."

Commented Brad Gair, an emergency management consultant who worked in New York City's Sandy response: ""Nobody does a particularly good job of it, and everybody keeps hiring them."